Program Homes In on Housing Industry : 'Financial Management Software' Is Changing Fortunes of Former Shapell Executive

Sixteen months ago, developer Bill Effinger's fortunes looked bleak. He had virtually no assets, owed his creditors more than $250,000, had lost his Point Loma home and his top-of-the-line BMW, and was driving his son's battered 1974 Volkswagen.

Today, Effinger still owes about $250,000, and he's still driving that old VW, but his outlook and his fortunes have changed dramatically.

With a bit of luck and serendipity, and no small degree of old-fashioned can-do spirit, Effinger is rebuilding his career.

He's out of the affordable housing industry--where he was unable to financially implement his otherwise progressive concepts--and into computer software for, of all things, the housing industry.

With the assumption that the building industry is ripe for automation, Effinger's Techno-Data has developed a software program aimed specifically at builders, developers, contractors and lenders.

Most software programs "will tell you income and how to meet SEC (Securities and Exchange Commission) requirements," said Effinger. "But they can't tell you how much materials cost, or how different plans are working financially, or projections on development projects."

Indeed, Effinger, a 55-year-old former executive with Shapell Industries, quipped that "at Shapell we used to joke about how we ran this $250-million-a-year business" by doodling cash-flow projections "on the back of envelopes."

The product will focus on small builders, Effinger said, because "about 83% of U.S. housing is built by developers who build fewer than 20 houses per year." (The figure is slightly higher in San Diego.)

And, with 4,400 contractors and developers in San Diego--59,000 in the state and 1 million in the nation--who are otherwise naive in the ways of planning-by-computer, Effinger has sought a product that is "so simple I could use it. Throughout the tests, I was the resident dummy."

Effinger's ideas have caught the fancy of Cubic Data Systems, a subsidiary of San Diego-based Cubic Corp. that markets computer equipment. Under an exclusive licensing agreement, Cubic Data will market Techno-Data's programs.

That way, Effinger said during a recent interview, "Cubic does all the marketing, advertising, training and support--all of the things that a new business would otherwise have to expend a lot of money on."

That kind of arrangement suits Effinger just fine. Instead of hassling with the traditional elements of expanding a new business, he can concentrate on making the product grow.

His two computer-programming partners, who co-founded Techno-Data with him in January, disagreed on that strategy, so Effinger said he bought them out about three months ago.

"I see five years of product development," he said. "The first two products--out of eight ultimately--are ready to market to 30 different levels of contracts and builders."

In 20 minutes, Effinger's main product can produce 16 spreadsheets and graphs with only 30 entries. And the entries, Effinger said, "are so minimal it's mind-boggling."

The software's appeal to Cubic Data is that it can help developers understand their finances, according to President Bill D'Alessio, who met Effinger earlier this year while sailing on San Diego Bay.

"The single most-critical reason that companies fail is because of cash flow problems," said D'Alessio. "They have to pay their suppliers, and their customers don't pay them. On paper, they look tremendous, but they have cash flow problems."

The first major customer may be Cubic Data's parent company, said D'Alessio, adding that Cubic's construction and financial management directors are analyzing the product for corporate use.

The software, Effinger contends, will also appeal to bankers and savings and loans. "They can see things from the builders' perspective and this will give them a consistency in numbers," he said.

Despite his rapid turnaround from last year's gloom, Effinger seems to maintain a sense of cautious optimism. "There's nothing brilliant about" the new software, he said. "It's just what (Nathan) Shapell and I were doing on the back of an envelope for all those years."